The Prime Minister requested the implementation of a pilot program for handling bad debts.

The guidelines for implementing the Resolution on bad debts must be issued before August 15, 2017, as requested by the Prime Minister.

To implement the pilot program for handling bad debts as approved by the National Assembly in Resolution 42 on piloting the handling of bad debts of credit institutions, the Prime Minister requested the leaders of relevant agencies to focus on directing the implementation of the regulations in the Resolution.

Accordingly, the agencies will implement measures to prevent and minimize the 발생 of bad debts and improve the credit quality of credit institutions; and promote the role of the Vietnam Asset Management Company (VAMC) in handling bad debts.

The Prime Minister has requested the implementation of a pilot program for handling bad debts. Photo: PV.

Furthermore, the goal is to reduce the ratio of non-performing loans (NPLs) on the balance sheets of credit institutions, NPLs sold to VAMC, and NPLs that have undergone debt classification measures to below 3% by 2020 (excluding NPLs of weak commercial banks approved by the Government for handling under separate plans).

In order to prepare for implementation, the Prime Minister requested ministries, sectors, and localities to disseminate and publicize the Resolution, completing this task before August 15, 2017.

The Ministry of Natural Resources and Environment shall preside over and coordinate with relevant agencies to guide the registration of mortgages on land use rights and assets attached to land as stipulated in the Resolution. The State Bank of Vietnam shall preside over and coordinate with relevant agencies to guide the operation of buying and selling non-performing loans by VAMC as stipulated in the Resolution. The guiding documents for the implementation of the Resolution must be issued before August 15, 2017.

The Prime Minister also instructed the Ministry of Justice to direct enforcement agencies at all levels to implement regulations on civil enforcement related to bad debts of credit institutions and VAMC as stipulated in the Resolution; and to focus on directing and organizing the swift and lawful implementation of judgments related to credit and banking that have become legally effective.

The Ministry of Public Security directs police agencies at all levels to carry out the task of maintaining security and order when credit institutions and VAMC exercise their right to seize collateral assets for bad debts being processed according to the provisions of the Resolution.

The Ministry of Natural Resources and Environment directs the agencies responsible for registering ownership and use rights of assets to carry out the procedures for transferring ownership and use rights of assets to the buyer or transferee of assets securing bad debts of credit institutions as stipulated in the Resolution.

Regarding non-performing loans related to the state budget, the Prime Minister assigned the Ministry of Planning and Investment to take the lead and coordinate with relevant agencies to develop a plan for allocating funds to settle outstanding debts for basic construction projects related to non-performing loans under the responsibility of the central budget and non-performing loans from government-designated loan programs.

Local authorities are responsible for developing plans to allocate funds to settle outstanding construction debts related to bad debts that fall under the responsibility of the local budget.

The State Bank of Vietnam is responsible for supervising, inspecting, and auditing credit institutions and VAMC in the implementation of the Resolution.

In addition, the Prime Minister instructed the State Bank of Vietnam to coordinate with the Ministry of Justice and other relevant ministries and agencies to review and report to the Government on proposals to improve the legal system for handling bad debts and collateral assets based on the practical application of the provisions in the Resolution before August 15, 2021.

In addition, the State Bank of Vietnam is also responsible for perfecting the legal framework on governance and management of credit institutions, especially risk management; continuing to research and propose improvements to legal documents on credit granting by credit institutions to limit the 발생 of bad debts; and strengthening the inspection and supervision capacity of the banking inspection and supervision system.

The Ministry of Justice is responsible for finalizing and submitting to the Government for promulgation the Decree on secured transactions.

According to VNE